The Malaysia Food and Drink Report Provides Independent Forecasts and Competitive Intelligence on the Malaysian Food and Drink Industry

Wednesday May 7 7:50 PM

Executive Summary

Malaysia's non self-sufficient food and beverage market - import dependent in spite of its vast agricultural and food processing potential - continues to feel the impact of rising global food prices keenly. Financial results released within the last few months by some of the country's leading food and beverage producers all share the common theme of rising ingredient, production and distribution costs having a damaging effect on profitability.

However, as BMI discusses in its newly published Malaysia Food & Drink Report for Q208, Malaysia is still a strong investment prospect for food and beverage manufacturers, irrespective of rising prices and inherent consumer price sensitivity.

In February 2008, one of Malaysia's leading local food and beverage companies, Yeo Hiap Seng, announced very disappointing full-year financial results. Faced with declining revenues - due to lower volume sales, disappointing product launches and intense competition - the company posted an operating loss of US$7.2mn; a loss exacerbated by rising operating costs.

Also in February, leading brewer Carlsberg Malaysia confirmed that it continued to struggle with its usual battles with black market sales and rising excise duties, made worse by its on-going struggles with rising production prices. Prior to this, in November 2007, dairy specialist Dutch Lady Milk revealed that its net profit had fallen by 15.6% in Q307. The reason? Spiralling agricultural commodity costs. Other key events from the quarter further illustrate this price pressure trend.

In January the government was forced to introduce supposedly short-term rations on cooking oil purchases at the retail level. The rations were an effort to preserve supplies and thus prevent dramatic price hikes and yet critical consumers deemed them a failure of the government to guarantee its people affordable basic food supplies; after all Malaysia is the world's largest producer and exporter of palm oil.

Shortages of basic commodities pushed inflation up to 2.3% in November 2007, its highest level since February that year and producers in the country started to acknowledge, when outlining strategies for 2008, that this was a problem that was here to stay. However - while all indicators suggest that spiralling food prices will remain a problem for at least the next few years - Malaysia's food and beverage markets still have much to offer investors.

At a forecast 2.4% in 2008, inflation in Malaysia still stands well below regional levels. Of course, economic growth in the slightly more mature Malaysian market is considerably lower than that of many of its regional peers and this does reduce inflationary pressures.

However, sound government fiscal policies and sustained government efforts to boost domestic agricultural output should continue to help protect Malaysia and that should provide some encouragement to those food and beverage producers that are currently battling with weak profitability.

Contents:
Executive Summary
Business Environment
Regional Food & Drink Business Environment Ratings
Table: Asia Pacific Food & Drink Ratings - Q208
Malaysia's Food & Drink Business Environment Rating
Table: Malaysia's Global Food & Drink Business Environment Ratings
 Peer Group
SWOT Analysis
Mass Grocery Retail
Malaysia Mass Grocery Retail Industry SWOT
Food And Drink
Malaysia Food And Drink Industry SWOT
Macroeconomic Outlook
Table: Malaysia - Economic Activity
Retail
Industry Forecast Scenario
Table: Malaysia Mass Grocery Retail Sales - Sales Value by Format
 (US$bn) - Historical Data & Forecasts
Table: Grocery Retail Sales by Format - Historical Data & Forecasts
Industry Developments
Market Overview
Table: Structure of Malaysia's Mass Grocery Retail Market By Estimated
 Number of Outlets
Table: Structure of Malaysia's Mass Grocery Retail Market - Value
 Sales by Format (US$bn)
Table: Average Sales per Outlet By Format - 2007
Food And Drink
Regional Overview: Confectionery In The Asia Pacific Region
Table: Leading Global Chocolate Manufacturers
Table: Leading Confectionery Companies In The Asia Pacific Region
Industry Forecast Scenario
Food
Table: Food Consumption Indicators - Historical Data & Forecasts
Value/Volume Sales Of Confectionery Sub-Sector - Historical Data &
 Forecasts
Table: Sectoral Trade Indicators
Drink
Table: Malaysia Beverage Sub-Sector Value Sales - Historical Data &
 Forecasts
Industry Developments
Food
Agriculture
Drink
Market Overview
Agriculture
Table: Malaysia Agricultural Sub-Sector Production Volume Data
And more...

For more information visit http://www.researchandmarkets.com/reports/c91017

Contact:

Research and Markets
Laura Wood, Senior Manager
Fax: +353 1 4100 980
press@researchandmarkets.com

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